Co-Founder & Chief Executive Officer at DemandFarm
Focus on key accounts is a lot more important in the B2B sector, and for good reason: the complexity of B2B businesses demands efficiency, and handling a large roster of customers all of whom clamor for attention can stretch teams thin. B2B businesses rely on customer management heavily to keep a steady sales flow. While they focus on key accounts, the management strategy usually follows regular account management practices.
Based on the size and the products offered, vendor organizations can have multiple criteria for identifying key accounts, but it is important to understand the nuances of customer needs before embarking on a key account management process. Leaders of the organization can guide or collaborate on creating a plan for key accounts, with multiple departments – and implement practices that benefit both the customer and the vendor.
The business of key accounts
The first factor that pops up when ‘key’ accounts are mentioned, is revenue. Classifying customers based on the revenue share they bring to the organization is a common classification method, as any customer that drives a large chunk of revenue should be treated well. These key account contacts can also refer new prospects, because word of mouth carries a lot of weight when critical business functions are involved. Their endorsement can also lend credibility to the organization and its products, along with opportunities to learn, evolve and innovate.
The major focus should be on prioritizing the future of the partnership, instead of instant gains. Understanding parameters like recurring sales, customer’s lifetime value, scope of innovation and common growth, and shared goals can make the choice of key customers obvious. Collaboration between multiple teams is necessary to provide a strong support that successfully nurtures them. Re-evaluating the current sales process can shed light on how long-term relationships can be formed with key customers, and can reveal if the upselling potential of the product is a feasible option.
What do successful key account managers do?
Providing training in strategic account management is the preferred option for 61% of organizations to achieve greater revenue and customer satisfaction. Training teams on understanding best account management practices, allows managers to determine what accounts can be termed ‘key’ ones and apply different tactics instead of focusing on closing a one-time deal. Strengthening ties and aligning with customer goals for the short and long term requires key account managers to think beyond the box.
1. Making personal connections that focus on business might sound like an oxymoron, but strategic account managers with their in-depth customer knowledge can provide extremely personalized solutions to the problems faced by their customers. They can change their pitch sequence to address these issues, and convince customers on how the product is suited to fulfil their needs.
They can also pitch customizations and add-ons that customers can use to extract additional value from their operations. The understanding of accounts keeps teams to be proactive, anticipate customer needs, and stay up-to-date on industry trends.
Having a personal equation also allows employees to alert and educate customers about potential changes. Customers nowadays want a partner who can guide them into understanding best practices and why they matter, so that they can focus on the core aspects of their job and not spending time on researching a tangential aspect of their task. Results show that customer satisfaction can lead to a bump of 20% and more in engagement, while improving revenue generation by more than 15%.
2. Tailoring solutions in the best way possible right from the moment of pitching, can allow managers to create customer-specific product plans and benefits. Showing the benefits of the product usage to the customers on a regular basis switches the focus of customers on to the extra value provided, can be even interested in upselling opportunities with the same product, or other offerings from the vendor. based on the needs of each account.
By tailoring the services to meet specific needs, the relationship can be elevated from buyer and seller to business partners. The big-picture view of key account management gives managers the freedom to fit relevant services in regular workflows of customer organization. The streamlining promotes confidence in the abilities of the solution provider, and interactions between both parties can take a consultation-based role.
3. Enabling decision making is essential for managing high-value accounts, which require time and resources of multiple teams and employees. Having a strong manager who can take calls that are in the interests of both parties and not just short-term gains, can drive operations smoothly.
People skills and clarity in communication are essential for key account managers who handle large accounts that have multiple client stakeholders. Organizations should also look into tools that help in structuring and analyzing data, so that managers can plan future strategies with certainty, and keep team members on track.
Why can’t all customers become key accounts?
There’s a limit to key account management practices, and no matter how sophisticated a vendor’s processes are, some customer partnerships don’t develop past the transaction phase. Trying to convert such clients by assigning more resources, can only complicate matters – as it is really difficult to scale a client don from ‘key’ status, without losing it. Enthusiastic managers might be keen to designate the account they’ve just won as ‘key’, but leaders should have steps in place to negate such euphoric decisions.
Highlighting differences between one-off transactions and potential partnerships through various lenses can solve this issue, and also helps managers look at factors beyond revenue (which is very important, but not the only important factor).The ratio of revenue to cost for customers shows the current state, while determining potential to expand ensures future growth, and highlights any mismatches with product fit. Based on the trajectory, key account managers can look at upselling and cross selling, and push their customers toward high value status.
Unlocking value from digital analytics
AI and ML (machine learning) have made further inroads into efficiency and usability, and they can help B2B account management practices evolve too. Implementing these solutions in the B2B sector can be quite seamless, as these models thrive on regular human support, and learn as they go. Integrating tech stacks can elevate the experience of key accounts, and frees up managers for problem-solving instead of looking for and providing information to key customers.
Better structured data
Without having to dedicate manpower to these processes, managers are able to focus on the long-term plan by letting technology drive data collection efforts. While digital analysis is crucial to successful key account management, the team needs to be trained to use it properly. Technology should be seen as a priority rather than an add-on to departments. If employees voice concerns about the implementation of this software, make sure to remind them of best practices and provide training as necessary.
Improve impact with personalized messages
Involve the negotiation of prices at the country level, offering worldwide support, and understanding the key procurement strategy of these clients.
The duties of a key account manager include developing customer relationships with worldwide branches and tracking revenue potential. Successful implementation of key account management should strengthen the customer relationship and provide a significant competitive advantage to the business.
Efficient reallocation of resources
Large customer accounts can be difficult to manage. There are often several decision-makers involved, with the services being used across multiple departments. Digital analytics help the account managers uncover opportunities for growth within these large organizations. Up-to-date data sets help keep the teams informed on the latest changes with clients. This allows managers to explore up-selling and cross-selling options and encourages timely outreach. requires strong ties with key customers and their internal stakeholders to ensure quality service.
Key account management is a hefty investment and needs to make sense for the business before it is implemented. Accounts with key potential have a few key characteristics to meet before reaching this level. Starting from earnings potential, managers can shortlist customers – and then consider if the costs of handling that customer adds any value to the system. This need not be monetary, as customers can help vendors in many ways – be it by word of mouth, enabling a learning culture, and others.
Six best practices for B2B key account management
Organizations practicing key account management activities need to implement certain best practices, and focus on increasing customer loyalty. This allows them to uncover new growth opportunities, and improve efficiency and innovation in the sales and marketing teams.
1. Start with a dedicated manager, transition into a team
Instead of asking sales managers to take care of the needs of multiple customers, asking them to focus on one key client simplifies the command chain and makes it easy to delegate tasks among departments. Since managers are focused on handling all customer interactions, they can use the information they already have from various sources and strive to help with customer issues. Vision and mission of their key account should direct their communication style, and explains how the services provided can directly impact the issue under consideration.
The data collected during these phases can be chronicled and structured with specialized tools, and can increase overall productivity while strengthening key relationships. Key account managers who take broader roles have the time and data to be analytical and personable, and communicate clearly with customer representatives, even at C-levels. Rest of the team can catch up, and learn from the leaders – account management tools can also help in educating newer team members, and the learning is intuitive.
2. Ensure smooth interaction between departments
Key account managers are not just responsible for managing high value customers, but the product roadmap/direction too. Right from the beginning when the account is transferred from sales to KAM teams, the focus should be on building trust. Establishing formal processes between the departments can keep directions clear, and allows for accounts to be organized strategically too.
Transitioning from sales to key account, should involve clear and detailed communication that includes contact changes, product details, what to expect, and other details that can differ from industry to industry or customer to customer. Updating these information on KAM tools as the process progresses, can build an up-to-date repository that can be used by any team member, set expectations, and create touchpoints.
3. Prepare for edge cases and rare needs
The only theory of generalization that holds true, is that there can’t be any generalization. Organizations operating in the same market can have processes that are 180-degree to each other, and that’s why it is essential for key account managers to become an expert about their customers. By in-depth analysis of customer goals and initiatives, managers can get to know the decision-makers and keep track of important stakeholders. They also have to understand industry trends, and keep tabs on current industry updates.
By conducting a needs assessment requirement, managers can discover pain points and find areas where the goals are aligned. When these match that of the customer, both parties are in a mutually beneficial partnership that propels both ahead.
4. Collaborate on a strategy roadmap
Once key customers are identified and engaged, managers should build strategies that suit the customer profile. With relevant inputs from the customer side, the strategy document can act as a roadmap, and can be reviewed/altered after reviews. These reviews should be consistent in their frequency, or teams run the risk of missing important occasions to update. This proposal can include creative solutions to customer problems, areas that can be made more efficient, processes that can be tuned, potential partnerships with other organizations, necessary resources, and more.
Establishing benchmarks makes it easy to track performance on long-term goals. The process of collaborating with the customer representatives might not be easy, but when done right – it gives customers a sense of contribution and can lead them to become a promoter within their organization.
5. Establish standards for effective communication
Standards bring a sense of normalcy to the whole process, and allows managers and customers to compare outputs to a meaningful figure. They also establish a regular communication routine, and the process of outlining schedules sets expectations for customers. IT also allows for a simplified monitoring of the account performance. Setting touchpoints, sending out meeting invites with a consistent frequency, following up, and updating customers on progress addresses necessary changes before they become issues.
When the vendor and the customer are on the same page, staying on schedule and fulfilling customer demands becomes easy – and helps customers to clear their queries and mention future needs as they arise.
6. Compare performance to standards
Setting KPIs and performance standards can show progress on key accounts, and establish benchmarks for success. Comparing on a regular basis also shows how customers are meeting their obligations to the vendor, and the process can be tweaked to ensure mutual long-term benefits to all parties involved. Evaluating such relationships on internal and external initiatives, helps teams to grab growth opportunities while optimizing high-return strategies.
The best practices identified by a vendor organization should be reassessed, if either side is losing value. The main aim should be to keep the relationship mutually beneficial, and the basic tenets of the partnership need to be revisited if it isn’t the case.
Starting key account management practices is a huge undertaking, but it comes with big rewards when handled correctly. Allocating resources, keeping departments informed on changes, and communicating clearly not only strengthens the relationship, but can lead to new business or new customer introductions too. Customer satisfaction and improved services are priority for businesses, and key accounts need the next level treatment.
With specialized KAM tools and collaboration, key account managers can make sure that the services offered are beneficial to all those who are involved. Adapting the product to suit the needs of customer accounts, can also give better insights on usage. Teams can use this information to modify products so that they serve customers better, and they can utilize automation and data analysis to free up resources or generate useful insights.